Funding

[Johnny Walker]

seems like the Hard money lenders are making harder for the average American to invest in real estate... The they're asking is out right murderer.. to a project.. and even worse to get yourself started..

[Lucas Machado]

@Johnny Walker - As a HML myself, who charges points up front and double digit percentage interest rate starting the first of the next month, I have to respectfully disagree...For one, if what you really have is a good/great deal, then there should be more than enough room in the spread to account for the hard money. Second, if the points and interest payment are not doable/suffocating, then the borrower doesn't have enough cash reserves, and the HML shouldn't be risking their money anyway. You might say "well you mitigate your risk by having a solid LTV and valuation," and that's correct, but that's in the event of having to foreclose with is our absolute last resort in a worst case scenario situation. We want to lend money, get paid, lend money, get paid, etc etc...We don't WANT to have to foreclose and become the owners - we just have to account for that possibility.

IMO, all of my requirements have a good, sound reason behind them, they aren't just there to extract as much return as possible. They exist for the benefit of myself AND the borrower (even if they might not realize that). 

Edit: Also, we the HML's don't really decide what the going rate for hard money is...The market decides that...There's plenty of people out there willing to pay the rates that you think are absurd, so the market clearly thinks it's a fine rate. This also means there are plenty of borrowers out there who are more qualified/a safer bet, than those who can't afford it.

If you can't afford hard money, just work other angles to build up enough capital so that you can afford it...And if you can afford it, there's no point in complaining about something you can't control :)

Best of luck to you.